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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, NHL revenues, relocation and expansion.

Bob McCown Fan590: 24-26 team NHL

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Old
10-21-2010, 12:48 PM
  #51
pooleboy
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Originally Posted by DiesIrae View Post
On the fan590 yesterday I heard Bob McCown and some sports columnists (from the globe, national post, and the star.) they all completely agreed on this one point in their discussion on the leagues finances;

if the NHL cut back its number of teams to the 24-26 range it would, a. be a better product because less jobs means more competition for roster spots -> better product = more fans, and
b. never worry about finances again and turn into one big cash cow, because no liability and more resources spent on growth instead of troubles.

while it is true that the NHL has a few money losing franchises (ok A LOT) its obvious scaling back operations to 24-26 teams wouldn't fly with the NHLPA or do any good for the leagues rep.
thats an interesting idea

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10-21-2010, 12:50 PM
  #52
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OK. How about we just wipe the slate clean & start from scratch, no teams at all, whats the criteria (population/arena/willing owner) & where do you go?. Starting with Canada,

1) QC
2) Mtl
3) Ott
4) Tor
5) Hamilton
6) Wpg
7) Edmonton
8) Calgary
9) Vancouver

and in the US;

10) Colorado
11) Portland
12) San Jose
13) LA
14) Anaheim
15) Dallas
16) Houston
17) Phoenix
18) Tampa (Sorry Sunrise)
19) Carolina
20) Nashville
21) Boston
22) Hartford
23) New York
24) New Jersey (ya, I know, I just shot the Islanders)
25) Buffalo
26) Detroit
27) St. Louis'
28) Philly
29) Pittsburgh
30) Minnesota
31) Chicago
32) Columbus
33) Milwaukee

42 Team League, which I'm in favor of moving forward. However, if we pull out the scalpel & either through relegation or contraction eliminate teams based on gate, ownership difficulties, fan apathy, geography, population, history & support heres what I think we'd be looking at;

1) Mtl
2) Tor
3) Ottawa
4) Edmonton
5) Calgary
6) Vancouver
7) San Jose
8) LA
9) NYR
10) Detroit
11) Chicago
12) Philadelphia
13) Pittsburgh
14) Boston
15) Buffalo
16) Minnesota

If we dispense with the salary cap & revenue sharing, IMO youd' wind up here;

1) Mtl
2) Toronto
3) NYR
4) Detroit
5) Chicago
6) Philly
7) Boston
8) LA
kind of looks like the original 6

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10-21-2010, 01:16 PM
  #53
Jules Winnfield
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Originally Posted by Fugu View Post
So you're okay with 30 teams, just not in their current locations.

I hate to break it to you, but every other option being bandied about is far smaller a market than these cities-- other than Houston.

Is it your opinion that moving to even smaller markets but keeping the same number of teams is somehow better? And why?
A second team in Toronto is not a small market.

Seattle or Portland would likely be a better fit than a warm weather area that doesn't care about hockey.

There are other options.

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10-21-2010, 01:18 PM
  #54
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Originally Posted by Fidel Astro View Post
I'm not too familiar with football and baseball, because both of those sports bore the crap out of me, but don't both pro leagues (NFL and MLB) have separate leagues-within-a-league? I mean, you see stats in the paper for "American" and "National" leagues in baseball...are they actually separate leagues, or are they the same as conferences in the NHL? If they're actually separate leagues that are both under the same overall "MLB" banner... has anyone considered doing this with the NHL? That might eliminate some of the issues and make more room for expansion both in Canada and in the southern states, because they could be geographically separated leagues.

I dunno. Maybe this is a horrible idea. Just something I was wondering about.
The MLB and NFL structures are historical artifacts of competing leagues.

The National League and American League were independent leagues. There were multiple pro leages/associations around the turn of the century. The NL (the Senior Circuit as it was sometimes called) stared in 1876 and had become the premier pro League. The AL developed from the minor league Western League, and raised itself raised to major league status in 1901 and started moving into NL cities (Chicago, Boston, Philadelphia, NY, St Louis). After some infighting the two leagues came to peaceful coexistance and began the World Series in 1903. Both leagues remained seperate entities and eventually expanded westward giving both leagues an independent national footprint. The AL & NL had seperate rules (I still despise the DH) and AL & NL teams did not play each other except in spring training and the World Series until 1997. In 1997 interleague play was introduced and in 2000 the AL and NL were disbanded as separate legal entities and MLB took over operations of both leagues.

The NFL today is the result of the merger of the then upstart AFL with the NFL in 1970 - much more a merger of equals than the ABA/WHA capitulations. The now AFC & NFC both retained national footprints and there was limited interleague play.

A split of two leagues/conferences can work in leagues where they developed independently - where fans historically thought of them as separate. I don't think it would work to split leagues which developed as unified leagues like the NBA or NHL - just look at the complaints about the NHL schedule as expansion has limited the number of inter-conference games.

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Old
10-21-2010, 01:20 PM
  #55
Jules Winnfield
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Originally Posted by Killion View Post
You mean contract. They call a Big Mac in France a "Chesseburger Royale'". Same thing. Kinda. .


I meant retract.

re·tract    
[ri-trakt]


–verb (used with object)
1.
to draw back or in: to retract fangs.
–verb (used without object)
2.
to draw back within itself or oneself, fold up, or the like, or to be capable of doing this: The blade retracts.

Related Words for : retract
abjure, forswear, recant, resile, shrink back

http://dictionary.reference.com/browse/retract

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10-21-2010, 01:20 PM
  #56
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i don't think anybody can deny the product would improve
The product would dramatically become worse.

Hockey is entertainment. Entertainment have some form of substance, but a lotof it is about perception.

Retraction would give the NHL a major negative buzz, and so the product would become a lot worse.

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Old
10-21-2010, 01:30 PM
  #57
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Fugu, the question you posed has no real adequate answer. What is a comfortable size for the league? Given the current pay structure and difficulties facing the league, your 24 team estimation holds some water.
Would it change if they had the $1b national TV money? (Think about this carefully. ; ))



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As for your point of franchise values being reduced by the shear amount of teams in the league is way off. When the NHL expanded in 1990, the going rate was $50 million to acquire a team. There are now 1/3 more teams and the going rate for a troubled franchise is north of $100 million. It is also estimated that an expansion franchise if made available would be in the $250 million dollar range.
I don't buy that expansion fee as realistic at all. Those figures were floated back when everyone was still high from getting a cap, and the economy hadn't shown that it was built on the greatest economic expansion in human history (post WWII, although one could argue that the 1840-1900 might have been bigger). Now that we have to deal with a mature economy that has been stagnating in terms of real income for some time, those assessments may not hold.

I also think if you do the inflationary adjustment, note that expansion fees were $80m during the 90's, and then consider the most recent values, the returns aren't very good at all. Phoenix, a huge market on my list, cannot garner $140m without subsidies. If we use JR's bid as one example, I think he was only willing to put in about $70m of his own money. No, I don't think $250m for an expansion team (other than TO) is at all realistic.
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The NHL is also a league that encompasses 2 countries. MLB and NBA with their token 'Toronto' franchises notwithstanding, makes the NHL a unique entity in North American Sports. A league size needs to be large enough to satisfy demand in any area large enough to support it, but not so large as to make you forget 3 or 4 teams actualy exist.

The league size, in my opinion, is not the major issue facing professional hockey. The product is great. The talent is very competitive and as evenly distributed as its ever been. Teams that have been cursed with long bouts of mediocrity are starting to be a thing of the past. The NHL's largest issue is its entire business model. Without any major TV contract floating the bulk of the revenues, teams are heavily reliant on gate receipts and associated rink revenue. This does not support the dollars being spent on the talent. If you lower the salaries to a manageable rate, you take the pressure off of the teams that are in the red and give their market the time they need to get a hockey 'tradition'.

It seems you're making the argument from strictly the talent dilution perspective. Lowering salaries to the lowest's ability to pay runs counter to any reasonable business principle available--- basically it's artificial propping up of markets. One must ask when and why that is justifiable. The windfall to the bigger teams would then be rather obscene.

With regard to TV money, centrally-generated, what is the model to use if this never eventuates? There is a feeling that we've been waiting for such a deal for at least for the duration of my entire life as a fan, and I started watching in 1971.....

What's the model to use when this isn't the 'obvious' or achievable endpoint?


I also don't think you're answering what you think the meaning of a league vs a business entity with an intent of expanding forever. Is that how how sports franchises should be managed?

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Old
10-21-2010, 01:31 PM
  #58
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Originally Posted by Fidel Astro View Post
I think geography needs to be considered in Canada as well. If you put aside every other factor, Winnipeg should be the next team in the league because of the massive stretch of Canadian prairie without an NHL franchise. There are two huge provinces (far larger than most US states) -- Manitoba and Saskatchewan -- located right in the middle of the country, without any NHL teams.
While they are large geographic areas, they've also low population density areas. All of Manitoba has about 1.2 million people. The much more compact Grand Rapids CSA has 1.3 million people, and is one of the largest American television markets without a major league sports team, is smack in the middle of Original 6 hockey territory, and yet no one's saying that Grand Rapids should be on anyone's short list for a team.

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10-21-2010, 01:41 PM
  #59
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Quote:
Originally Posted by Jules Winnfield View Post

I meant retract.
Quote:
Originally Posted by Ola View Post

Retraction would give the NHL a major negative buzz, and so the product would become a lot worse.
Ohhh Man.?!. Now you've got the Swedes doing it.

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10-21-2010, 02:57 PM
  #60
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Originally Posted by Fugu View Post
Would it change if they had the $1b national TV money? (Think about this carefully. ; ))

Given the current CBA, the players would take 55% of that new revenue. This amount would not have any positive effect on teams losing 15mil plus a year. Teams on the bubble would turn a profit. It still breaks down to a scenario in which owners, in general, are overpaying their talent in relation to what they are making themselves.


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I don't buy that expansion fee as realistic at all. Now that we have to deal with a mature economy that has been stagnating in terms of real income for some time, those assessments may not hold.
I also think if you do the inflationary adjustment, note that expansion fees were $80m during the 90's, and then consider the most recent values, the returns aren't very good at all. Phoenix, a huge market on my list, cannot garner $140m without subsidies. If we use JR's bid as one example, I think he was only willing to put in about $70m of his own money. No, I don't think $250m for an expansion team (other than TO) is at all realistic..
Its realistic, as you illustrate, depending on location. If Toronto were given an opportunity for a second franchise the fee would be likely well North of 250 mill. A place like Las Vegas which is desperately trying to attract any major sports franchise could be in the $250 mill range, where as K.C. would be a much smaller number. regardless of how you cut it, even taking inflation into account values are higher today with 30 teams than they were with 21. If Hulsizer's 'artwork' price of 165mil actually goes through in Phoenix it is still a paid for price. It may be incentive laden, but it still goes into the books at that price.



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It seems you're making the argument from strictly the talent dilution perspective. Lowering salaries to the lowest's ability to pay runs counter to any reasonable business principle available--- basically it's artificial propping up of markets. One must ask when and why that is justifiable. The windfall to the bigger teams would then be rather obscene.
Not at all. In my previous post I mentioned that talent is anything but diluted. They are paying a premium that is not justified by the revenues collected. The talent drives the business, but the market is not providing the revenue to pay the extent of the premium the talent is collecting.

With half of the teams in the red, and a few just on the bubble, the teams actually making profit are giving away their juice to accomodate the inflated payrolls in suffering markets. If a team is making a windfall of profit, how is that obscene? Isn't that the reason for any businesses existence? The players in the end are in fact employees. They may be part of the product as well, but they are employees. if I got paid 55% of the revenue I generated in my position I would be a very wealthy man. In a few years I could even buy the Coyote's.

Quote:
With regard to TV money, centrally-generated, what is the model to use if this never eventuates? What's the model to use when this isn't the 'obvious' or achievable endpoint?
This is where you and I agree. Without a player with the profile of a Gretzky/Howe/Orr in the NHL, I don't feel the deal will materialize. Crosby and Ovechkin are amazing talents, but don't walk in the same light as the aforementioned. Which also goes to the point that the money commanded by the players is far beyond their worth in the marketplace.

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I also don't think you're answering what you think the meaning of a league vs a business entity with an intent of expanding forever. Is that how how sports franchises should be managed
I was fairly clear on stating that I believe the comfor zone should be 32 teams. Expanding forever is not the answer. Even the NFL who could likely expand to 15 more markets and sell out every event knows that it has to cap its participation level in its league.

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Old
10-21-2010, 03:05 PM
  #61
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Can we give the Panthers, Thrashers et al a really good team that makes the playoffs many years in a row before we start moving them here, there and everywhere?
You can't create more winning teams, you can only shuffle winners and loser around.

So who, specifically, would you like to take the winning teams away from?

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10-21-2010, 03:08 PM
  #62
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Someone made the point that contraction would eliminate the 'enforcer' position.
It would be the other way 'round. With so many more skilled players in the top 9, it becomes MORE affordable to put a couple of lug nuts on the roster.

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10-21-2010, 03:12 PM
  #63
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A second team in Toronto is not a small market.

Seattle or Portland would likely be a better fit than a warm weather area that doesn't care about hockey.

There are other options.
Correct. Toronto as a city alone has a population larger then the entire Vancouver Metropolitan area. To the west of Toronto stretching from Brampton, Mississauga, Halton Region, Hamilton, Guelph, and Kitchener-Waterloo there are close to if not more then 3 million people.

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10-21-2010, 03:28 PM
  #64
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A second team in Toronto is not a small market.

Seattle or Portland would likely be a better fit than a warm weather area that doesn't care about hockey.

There are other options.
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Originally Posted by htpwn View Post
Correct. Toronto as a city alone has a population larger then the entire Vancouver Metropolitan area. To the west of Toronto stretching from Brampton, Mississauga, Halton Region, Hamilton, Guelph, and Kitchener-Waterloo there are close to if not more then 3 million people.
Toronto is the most lucrative hockey market in the world. No other place comes close.

Problem is that there is only one TO market.

Other than cool weather, I'm not sure why Seattle or Portland seem that much more desirable. So we're still left with Houston being the only megapolis that doesn't have a team, and outside TO, any move would be to smaller media markets.

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10-21-2010, 04:01 PM
  #65
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Originally Posted by Fugu View Post
Toronto is the most lucrative hockey market in the world. No other place comes close.

Problem is that there is only one TO market.

Other than cool weather, I'm not sure why Seattle or Portland seem that much more desirable. So we're still left with Houston being the only megapolis that doesn't have a team, and outside TO, any move would be to smaller media markets.
Bolded for truth Fugu.

Let's take it a step farther. Ontario produces more NHL talent than anywhere else as well. No place would have greater potential than a GTA team. Mississauga, K-W whatever...

If you look for contraction, I truly have no clue what the optimum size is, hell I'm not even sure how the NHL defines it's business goals. Without that, it's impossible for me to guess.

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10-21-2010, 05:47 PM
  #66
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You can't create more winning teams, you can only shuffle winners and loser around.

So who, specifically, would you like to take the winning teams away from?
I didn't mean to LITERALLY provide those franchises with a winning team just like that.

My main point is those markets are bad right now because nobody wants a loser. And until such time that they become winners, there will be fan apathy. It's no different than any perennial loser in any North American pro sport.

I have seen it up close and personal with the Montreal Expos. Everybody loves a winner. Nobody wants a loser. And when things look hopeless, or when there isn't anything really appealing for the fan to head out to the venue, then it turns ugly.

I don't think Atlanta would be better off in Toronto (second franchise) or Quebec City or Winnipeg, unless of course they suddenly became a winner.

Timing is everything. If the Nordiques had postponed moving to Denver for a year, somehow brainwashed Rejean Houle to trade them Patrick Roy in-province, then they'd have won a Cup and that would have provided the necessary momentum in the province to get the arena they needed/still need.

My main point is if we pull the rug from under some of these struggling markets when their fans haven't fully been privy to the entire NHL experience (Stanley Cup playoff run included), then they are going to be unfairly blamed for most of the team's ills. And it's not their fault. This is entertainment. If your product isn't enticing people in a certain area, you are failing as a league. Fans aren't failing as fans, they just want a slice of what the other fans take for granted.

Last point. A traditional hockey market didn't start out as a traditional hockey market. It takes time. The seeds of grassroots hockey have been planted and it's starting to grow. We're getting more and more players from all over North America now, not just the traditional areas. That will only become greater over time. Let's not kill this now. It wouldn't make sense to do so.

Hey, I'm all for adding Canadian teams. Let's expand, instead. Expansion teams need time, and Canadian fans have patience to give them that time. Expansion teams also provide the league with money, which is a good thing. I'd rather see the league go to 32 than 24-26.

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10-21-2010, 11:46 PM
  #67
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On the fan590 yesterday I heard Bob McCown and some sports columnists (from the globe, national post, and the star.) they all completely agreed on this one point in their discussion on the leagues finances;
Sorry to ask, but which day and which hour was this on. I am trying to find it on the podcasts, and can't

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10-22-2010, 12:55 AM
  #68
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Would people be in favor of folding Vancouver? Detroit? Philadelphia? Ottawa? St. Louis? Of course not!

So why would anyone be in favor of folding the OTHER teams that Mike Sillinger played for?????????

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10-22-2010, 08:40 AM
  #69
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It's Bob McCown, this is the same guy that thinks that the NFL won't come to Toronto because TV revenues won't grow. Meanwhile the NFL will likely have soaring TV deals no matter what and Toronto (as well as Canada) is a haven for new media due to people on the internet per capita.

Not to mention there are some markets they are in right now that cannot afford to pay NFL prices.

But hey, Bob McCown admittedly doesn't use a computer (or a cell phone much), so what does he really know?

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10-22-2010, 08:44 AM
  #70
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Would people be in favor of folding Vancouver? Detroit? Philadelphia? Ottawa? St. Louis? Of course not!

So why would anyone be in favor of folding the OTHER teams that Mike Sillinger played for?????????
Sillinger played for so many teams that no matter which team folds/relocates, there's a very good chance Sillinger would have played for them.

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10-22-2010, 10:43 AM
  #71
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Would people be in favor of folding Vancouver? Detroit? Philadelphia? Ottawa? St. Louis? Of course not!

So why would anyone be in favor of folding the OTHER teams that Mike Sillinger played for?????????

Media market size, other than Ottawa. Why would you fold a team where you're making plenty of money? And why would fold a team that isn't making money right now but is in the top ten or twenty in US/Canada as a market?

Failure in a HUGE market is more a stain against the entire league than in smaller cities.

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Sillinger played for so many teams that no matter which team folds/relocates, there's a very good chance Sillinger would have played for them.

Poor guy. I always remember him for his infamous quote, to paraphrase: In a draft featuring Nick Lidstrom, Sergei Fedorov, and V Konstantinov, Mike Sillinger was drafted in the first round.

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10-22-2010, 11:12 AM
  #72
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Oct 21 2010 attendance at 4 seperate NHL games

6706 attendees in the Jobing arena to see their beloved Dog's

the thrashers did a little better at 8,820

The BJ's had their smallest crowd ever 9,802

the Panthers saw 11,580 of their faithful

this is major pro sports and these teams more often than not are drawing minor league crowds, I know that people don't like hearing this or acknowledging the truth of this situation, but this is just plainly embarrassing

Unless a miracle occurs and suddenly ESPN and NBC getting into a bidding war to carry regular season games nationally, the NHL needs to re-think it's strategy in regard to the non traditional markets and maybe a 26 team league is the answer

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10-22-2010, 11:29 AM
  #73
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this is major pro sports and these teams more often than not are drawing minor league crowds, I know that people don't like hearing this or acknowledging the truth of this situation, but this is just plainly embarrassing

That's the painful part to acknowledge. I don't view it so much as embarrassing as unsustainable. Your next paragraph highlights what needs to happen to justify the actions taken because transferring money from bigger revenue centers with no chance for some payback doesn't make a lot of business sense.



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Unless a miracle occurs and suddenly ESPN and NBC getting into a bidding war to carry regular season games nationally, the NHL needs to re-think it's strategy in regard to the non traditional markets and maybe a 26 team league is the answer

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10-22-2010, 11:53 AM
  #74
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Unless a miracle occurs and suddenly ESPN and NBC getting into a bidding war to carry regular season games nationally, the NHL needs to re-think it's strategy in regard to the non traditional markets and maybe a 26 team league is the answer
I believe in magic, but Im also a realist. If the league were to go down that slope, I would argue that even 26 teams is unsustainable. 20 teams would be my optimum size. Create an environment of exclusivity in order to proactively cultivate growth & development/expansion down the road, only next time do it proactively, the right way.

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That's the painful part to acknowledge. I don't view it so much as embarrassing as unsustainable.
Yes, it would be very painful indeed, which is precisely why it'll never happen and the league will be shackled to its reactive crisis management mode for years to come.

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10-22-2010, 12:10 PM
  #75
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Preds at 94.8% attendance

http://espn.go.com/nhl/attendance/_/sort/homePct

In what is usually the worst time for the team the Preds have 2 sell outs out of 5 home games and are doing well so far.

Let's see if they can keep the momentum going throughout the season.

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